Chinese-Australia relations may not be ‘toxic’, but they do need to keep warming up


Tony Walker, La Trobe University

When former Trade Minister Andrew Robb took to the ABC’s AM program to sound off about a “toxic” relationship between Australia and China, he exposed a rippling debate about how to manage an increasingly comlex foreign and security policy challenge.

Long gone are the days of the John Howard formula that Australia did not have to choose between its history, meaning America, and its geography, meaning China. Choices are no longer binary.

While the Robb word “toxic” may be an exaggeration, stresses in Australia-China relations are such it is clear we have entered a new and more challenging phase.

For a start, China is undergoing what is, arguably, the most testing moment of an economic transformation that began in 1978 at the third plenary of the 11th Central Committee of the Chinese Communist Party. This is when Deng Xiaoping re-emerged to initiate one of the more remarkable economic shifts of the modern era.

Apart from a hiatus caused by the Tienanmen uprising in 1989, and an economic soft-landing in the mid-1990s, China has bounded ahead economically, and has seemed unstoppable – until now.

China’s economy and political system has encountered the sort of difficulties that were inevitable. Put simply, an investment driven – as opposed to consumer-led – model is running its course, piling up massive government and bank debt in the process.

China risks becoming caught in a “middle income trap” in which a developing country, having enacted the easier reforms, gets stuck in second gear in its effort to push ahead with its economic transformation.

You can only build so many road, bridges, fast trains, airports, ports and housing developments. Many of the latter have become “ghost cities”.

At this month’s National People’s Congress, the annual session of China’s “parliament”, Premier Li Keqiang gave what was, by Chinese standards for these sort of cheerleading events, an unusually downbeat assessment of challenges ahead.

China, Li said, faces difficulties “of a kind rarely seen in many years”.

What is undeniable is that China’s economy is faltering, its ability to create millions of new jobs annually to employ a restless population is being stretched, and its management of a continuing economic transformation has come under unusual stress. US-China trade tensions are not helping.

In counterpoint to the need for a more dynamic economic environment, its leadership, under President Xi Jinping, is asserting even tighter political controls when it should be giving freer rein to its entrepreneurial class.

This is the central contradiction of a model that has delivered what is the most extraordinary event in world economic history since the industrial revolution. But that model clearly has its limitations compared with those, say, of neighbouring Japan, South Korea and Taiwan.

From an Australian perspective, a slowing and, perhaps more to the point, anxious China is not good news. While economists might argue that a slowdown and thus the need for Beijing to stimulate its economy by ramping up infrastructure projects will benefit iron ore and coal exporters, economic pressures more generally should be concerning.

A Chinese regime that feels itself under stress from within and without may prove to be more cantankerous, and unpredictable. Australian policymakers should be mindful of the consequences of China getting through this difficult stage without mishap.

Of course, forests have been felled publishing predictions China would be unable to maintain its remarkable transformation since early glimmers of an opening to the outside world appeared in 1978, two years after Mao Zedong’s death.

This brings us back to Andrew Robb’s observation about a “toxic” relationship between Beijing and Canberra. Referring to the shelving of a plan to develop a health precinct in China to match that of the Texas Medical Centre – the world’s largest medical facility – Robb said central government officials had kyboshed the arrangement due to ongoing tensions with Australia.

Australian medical professionals would have helped establish the facility. Robb said Landbridge (the company for which Robb was consulting) was

told in no uncertain terms by the seniors officials that unfortunately the relationship between Australia and China had become so toxic that this would be put in the bin.

Leaving aside Robb’s own chagrin at losing a lucrative consultancy, what is the fair judgement about the state of Australia-China relations?

And, what of Robb’s criticism of sections of the Australian security establishment, notably the Australian Strategic Policy Institute? He accused ASPI, a hothouse of China negativity, of being “a mouthpiece of the US security agencies and its defence industry”.

Given ASPI’s hawkish views on China more generally, Robb has a point.

His assessment is correct that China-Australia relations were off-track when the decision was made to scupper the Landbridge-proposed medical facility. But it is also the true that by the end of last year the relationship had been “reset”.




Read more:
Australia and China push the ‘reset’ button on an important relationship


Foreign Minister Marise Payne went to China in November for what was described as a cordial exchange. This followed a two-year freeze in relations during which no senior Australian official was welcomed in Beijing.

China had made no secret of its displeasure over speeches delivered over time by both then Prime Minister Malcolm Turnbull and then Foreign Minister Julie Bishop in which they had criticised Beijing’s expansionist activities in the South China Sea, and, in Bishop’s case, China’s political model.

Turnbull compounded the situation when he misappropriated an expression attributed to Mao in proclaiming the People’s Republic on October 1, 1949. Australia had “stood up”, Turnbull said, when unveiling laws designed to curb foreign interference in Australian domestic affairs.




Read more:
Australia needs to reset the relationship with China and stay cool


Next day, Turnbull made things worse by repeating Mao’s words in Mandarin in his description of legislation that was clearly aimed at Chinese influence.

So what of Robb’s comments? Whatever toxicity existed between Canberra and Beijing seems to have dissipated somewhat. However, real risks remain in management of what is Australia’s most challenging relationship.

It is no good pretending otherwise. China is not a benign power. It will seek to get away with what it can. It resists abiding by a roadmap for a rules-based international order, as we understand it. It will use cyber technology ruthlessly to advance its interests by dubious means, on occasions. It will “disappear” foreign nationals of those countries which incur its displeasure. It will invest in agents of influence in the Australian system. This includes universities.

All this requires a level of vigilance on the part of the security agencies, and, possibly, a new White Paper aimed specifically at just how Australia might manage a complex relationship that is likely to become, more, not less, complicated.

Bear in mind one in three export dollarsdepends on a functioning relationship with China.

This is an unsatisfactory situation, but it is the reality.

On the other hand, no purpose is served by yielding to a Canberra security establishment whose machinations risk chilling a relationship that needs to be warmed up, not cooled down.

Former ambassador to China, Stephen Fitzgerald, proffered some good advice this week when he said in a newspaper interview that Australia needed to deepen its engagement with China rather than draw back, since, unlike the US, we are “living in a Chinese world”.

That, whether we like it or not, is the case.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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No matter who wins the next election, managing the China relationship will be tricky – and vital



File 20190211 174873 1xkcvm3.jpg?ixlib=rb 1.1
Since the Whitlam government in 1972, the major parties have taken a similar approach to managing relations with China, albeit with a few key differences.
AAP/EPA/Roman Pilipey

Tony Walker, La Trobe University

This is part of a major series called Advancing Australia, in which leading academics examine the key issues facing Australia in the lead-up to the 2019 federal election and beyond. Read the other pieces in the series here.


China policy will not be a vote-shifting issue in the 2019 federal election. As usual, the economy and tax in particular will dominate this election.

But from a foreign policy standpoint there is no more important issue than achieving a reasonable balance between the United States, Australia’s security guardian, and China, its linchpin economic partner.

Getting the balance right and thus avoid being wedged between its security and economic interests represents what is arguably the most significant foreign policy challenge in Australian diplomatic history since Federation in 1901.

Mostly a unity ticket – but with some key differences

In 1972, the Whitlam Labor government ditched an anomalous attachment to Taiwan as China’s legitimate representative. Since then, China policy has, for the most part, been bipartisan.




Read more:
Australia and China push the ‘reset’ button on an important relationship


Little separates Labor and the Coalition in a relationship that increasingly has been driven by economic ties. But there are nuanced differences.

Senior Coalition and Labor spokespeople have recently delivered addresses in Singapore that provide a useful insight into their thinking.

In January this year, Defence Minister Christopher Pyne spoke at the Fullerton Forum convened by the International Institute of Strategic Studies. A year ago, Labor’s foreign policy spokesperson, Penny Wong, addressed the Lee Kuan Yew School of Public Policy.

Both Pyne and Wong cautioned against allowing tensions between the US and China to divert Australia from pursuing its own interests, even if those interests do not accord with those of its security guarantor. Pyne said:

Unquestionably, rivalry between the US and China will be a feature of our international outlook in the foreseeable future. However, it is critical that US-China relations do not come to be defined in wholly adversarial terms.

In Wong’s case, she says simply that it remains “in the interests of all South East Asian nations that the US remains strategically engaged in the region”.

Where the two sides differ by degree lies in Wong’s assessment of risks to a “rules-based” international order posed by competition between an established and rising power.

She is gloomier than Pyne about the international outlook. She told her Singapore audience:

Whether or not you agree with President Trump’s view that the international rules-based system is not working, there is no disputing the international rules-based order is under its greatest period of stress since the end of the second world war.

Pyne was more sanguine. He said:

Cold War commentary fails to see a fundamental but defining difference, namely the world’s economies are far more closely integrated and mutually dependent than they were when the West contested the Soviet bloc.

How would a Labor government change the relationship?

Where this is leading is that a Labor government would probably make a more conspicuous effort to bolster regional partnerships with the ASEAN bloc and India as a hedge against tensions between the US and China.

Labor might also seek to give itself more flexibility in positioning Australia between its strategic ally, the US, and its dominant economic partner, China. This fine-tuning would need to be carried out subtly to avoid upsetting cornerstone security arrangements that have served the country well.

Wong uses the phrase “constructive internationalism” – borrowed from Labor’s former foreign minister, Gareth Evans, who coined it a quarter century ago – to define Australia’s national interests.

In the Evans formula, the phrase describes a policy that is motivated by values in pursuit of interests. “If interests describe the reasons for action, values describe the motives for action,” Wong told her Singapore audience.

Foreign Minister Marise Payne meets Chinese Foreign Minister Wang Yi in Beijing in November 2018.
AAP/EPA/Thomas Peter

Where both sides of Australian politics converge is on the need to engage China, but not at the expense of disregarding Beijing’s flagrant attempts to assert its sovereignty in disputed waters of the South China Sea. Pyne put it like this:

There is no gain in stifling China’s growth and prosperity … We are not interested in containing China, but we are interested in engaging and encouraging China to exercise its power in ways that increase regional trust and confidence.

The building and militarisation of artificial features in the South China Sea, for instance, has not increased regional confidence in China’s strategic intentions.

This might be regarded as an understatement.

Labor’s position on China’s overreach in the South China Sea mirrors that of the Coalition. Wong said:

Should the Australian Labor Party form government, we will certainly be advocating resolution of territorial claims and the exploitation of fishing stocks and seabed resources through negotiations between claimants rather than through unilateral action such as the militarisation of artificial islands.




Read more:
Australian-Chinese author’s detention raises important questions about China’s motivations


In his Fullerton lecture, Pyne raised the possibility of Australia joining “multilateral activities in the South China Sea to demonstrate they are international waters”.

In his reference to so-called FONOPs (freedom of navigating exercises), he stopped short of indicating whether Australia planned to join allies in sailing within 12 nautical miles of China’s militarised features in South China Sea waters. The Coalition has not ruled out this possibility.

What is unarguable is that, after a long period of US strategic dominance, Australia’s security environment is shifting dramatically. Neither major party can escape this reality.

Pyne made some telling points that reflect the extraordinary complexity and dimensions of a region in flux – one that fleetingly, we should remind ourselves, anticipated an American century.

That prospect disappeared in the blink of an eye as China’s spectacular economic rise, linked with an expansion of its military capabilities, shifted the regional power balance.

The challenges ahead

Pyne’s scorecard brings home the scope of the challenge facing the next government, Coalition or Labor, in getting middle-power settings right. Or, put another way, to avoid being crushed by bigger players.

The Indo-Pacific is home to eight of the ten most populous nations on earth. Half of the world’s population calls it home.

Twelve of the member states of the G20, including the three largest economies in the world, are Indo-Pacific nations. And nine of the world’s ten busiest seaports are in the Indo-Pacific, as are seven of the world’s ten largest standing armies.

In the latest Stockholm International Peace and Research Institute (SIPRI) survey of global military spending, Australia ranks 13th. This is ahead of Canada and behind Italy. Five Indo-Pacific nations spend more on defence – the US, China, India, Japan and South Korea.

China’s military expenditures are six times those of Australia’s defence allocation.

Where the Pyne and Wong speeches overlap is in their warnings of the risks of isolationism. This can be read as a rebuttal of Donald Trump’s “America First” policies. Pyne said:

We fall short of our economic potential when parties choose to withdraw behind walls and withdraw from mechanisms designed to make us stronger.

Australia envisages a region that is more closely integrated and where we all collectively reject isolationism. We must work together not apart.

Labor would endorse those sentiments. Wong makes it clear that, for the time being, she would regard the prospect of the US reverting to a more collaborative posture as remote.

No matter who forms the next government, Australian policymakers are dealing with an end of certainty in a region remaking itself. They will need to be flexible – and resourceful.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Chinese coal ‘ban’ carries a significant political message


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The market reaction to the “ban” was telling, underscoring the problem of being so reliant on a single client.
Shutterstock

Tony Walker, La Trobe University

As a standoff over Australian coal shipments through the northern Chinese port of Dalian continues, it underscores the extent of Australia’s economic dependence on China.

One-third of all Australia’s exports globally are China-bound.

Market reaction to a Chinese coal “ban” was telling and reflected concerns about an over-dependence on one client.

The Australian dollar tumbled before recovering. Coal producers were pegged back.

Initially, the decision was attributed to local customs officials, but this misunderstood the nature of the Chinese regime.

No decision to restrain imports from China’s largest supplier of raw materials would be taken without the imprimatur of the leadership in Beijing.

While the freeze on Australian coal imports through Dalian may prove to be a short, sharp shock, what China’s action does convey is a message that Beijing can turn an import spigot on and off at will.

Why it might have chosen now to remind Australia of its vulnerability to central planning decisions, arbitrarily applied, is not clear. But it’s reasonable to speculate that politics is involved.




Read more:
Huawei executive’s arrest will further test an already shaky US-China relationship


What is notable about China’s action is that it does not, at this stage, affect Russian and Indonesian coal imports. Australia appears to have been singled out.

Australia is far and away the world’s largest coal exporter. It accounts for more than 20% of China’s coal imports, the bulk of it thermal coal for greedy power stations.

China’s foreign ministry has said there is no “ban” on Australian coal imports through the Dalian port. But with demurrage charges mounting on coal carriers obliged to stand offshore for 40 days or more, use of the word “ban” is moot.

If politics is a factor, then several possibilities present themselves in what has been a rocky relationship over the past several years. Beijing could be signalling its displeasure over Australia’s decision to bar the technology company Huawei from participating in the build-out of Australia’s 5G communications network.

Other possible causes of Chinese unhappiness include Canberra’s decision to deny a re-entry permit to Australia for businessman Huang Xiangmo. This follows a decision to deny Huang Australian citizenship on grounds that his links with the Chinese Communist Party render him a security risk.

Delicate late-stage negotiations between the US and China on trade could also be a factor. Beijing might regard meting out a bit of grief to one of America’s closest allies as a reminder of its ability to exact retribution if things do not go its way.

Then there are the twin issues of the South China Sea and China’s push into the southwest Pacific.

Canberra is a persistent – if low-key – critic of Beijing’s militarisation of disputed territory in waters that are subject to claims and counter-claims before international tribunals.

These waters span trade routes through which the bulk of Australia’s seaborne trade passes to its markets in north Asia, including trans-shipment points like Dalian.

Beijing will also not have overlooked a vigorous campaign against its interests being waged by elements of the Australian foreign and security policy establishment.

At the forefront of this criticism is the government-funded Australian Security Policy Institute. ASPI spokespeople have focused particularly on China’s alleged breaches of cyber security.

Sections of the Australian media, feeding off ASPI criticism of cyber breaches, will have added to Chinese displeasure.

Then there are irritants like the continued detention on security grounds of Chinese-Australian writer Yang Hengjun. Yang has been a persistent critic of the Communist Party.

While a freeze initiated by Beijing – during which no senior Australian official visited China for high-level talks for the better part of two years – has been lifted, relations remain problematic.

Foreign Minister Marise Payne went to Beijing late last year for talks with her Chinese counterpart. These were designed to “re-set” the relationship. But episodes like the “ban” on coal shipments foreshadow further difficulties in the Sino-Australia relationship as China’s power and influence grow.




Read more:
Australia and China push the ‘reset’ button on an important relationship


Other explanations offered for what appeared to be, on the face of it, arbitrary action against Australian coal shipments relate to pressures on China’s hard-pressed domestic producers.

In a slowing Chinese economy, competition from higher-quality and competitively priced imports has battered domestic coal producers.

In other words, a number of factors are likely to have been at play in China’s decision to halt Australian coal imports through Dalian, if only temporarily.




Read more:
Australian-Chinese author’s detention raises important questions about China’s motivations


These coal shipments, it should be noted, amount to a relatively small proportion of the 300 million tonnes shipped annually.

About 7 million tonnes passes through Dalian. This is coking or metallurgical coal for the steel industry, to distinguish it from thermal coal for power generation.

In 2017-19 coal exports to China were worth about A$13 billion, second only to exports of A$50 billion of iron ore and concentrates.

However, if the ban spreads to other ports Australian exporters will have cause for much deeper concern.

Uncertainties among Australian exporters are not helped by an opaque Chinese system that denies transparent explanations – unless it suits Beijing – of actions that are unfriendly to its trading partners.

China’s slowdown in imports of Australian wine last year is a case in point. The problem has eased, but the episode unnerved wine exporters whose production is geared significantly to a booming Chinese market.

Australian officials will also be concerned about action taken against Canadian nationals who have been detained in apparent retaliation for Canada’s arrest – pending extradition to the US – of the daughter of the Huawei founder.

Meng Wanzhou, Huawei’s chief financial officer, has been fighting extradition through the courts in Vancouver to prevent her removal to the US, where she has been charged with violations of sanctions against doing business with Iran.

The arrest of two Canadians – former diplomat Michael Kovrig and businessman Michael Spavor – for allegedly endangering China’s national security is widely viewed as retaliation against Canada for the arrest of Meng.

What all this tells us is that dealing with a more nationalistic, assertive and ruthless China in pursuit of what it regards as its national interests will become more, not less, difficult.

Western officials can talk about a rules-based international order until they’re blue in the face, but if the rules don’t correspond with Beijing’s own preferences, then chances are it will disregard them.

This is a reality that has taken some time to impress itself on those who might have believed that encouragement to China to live up to expectations of it becoming a “responsible stakeholder” will survive an encounter with Chinese self-interest.

In that regard, Beijing and Washington are not dissimilar in a new era in which a more nationalist US is shunning multilateral trading agreements like the Comprehensive and Progressive Agreement for Trans Pacific Partnership and looking to a narrower self-interest.

The new US-China trade deal is set to be concluded next month. You can be sure that interruptions to Australian coal shipments to China will be very far from their concerns.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

What’s worse than the US-China trade war? A grand peace bargain


Giovanni Di Lieto, Monash University

It’s hard to tell if Donald Trump’s trumpeting of “substantial progress” in trade talks, leading to a cosy weekend at Mar-a-Lago to sign a deal with Chinese president Xi Jingping, represents reality.

Most observers, though, will be relieved by his decision to again defer his threat to escalate the US-China trade war and hike up tariffs from 10% to 25% on US$200 billion worth of Chinese imports. (The total value of US imports from China in 2018 was US$493 billion.)




Read more:
WTO offers Trump a solution to enforcing a trade deal with a China that breaks promises


Trade wars are generally considered bad for everyone. KPMG has calculated a full escalation of the trade war – with a 25% tariff applying to all goods traded (worth US$604.5 billion in 2018) – would cost Australia A$58 billion over the next decade.

But far worse for Australia, and its Asia-Pacific neighbours, could be a deal to end the trade war, especially if it involves a grand geopolitical bargain between the US and China.

Bilateral world order

Considering the US administration’s hard-line approach, for a truly comprehensive deal to occur China would have to subscribe to a serious restructuring of its industrial system. This would ultimately mean phasing out covert state subsidies, liberalising its financial markets and giving up on meaningful technological competition in security-sensitive sectors.

But out of fear an ongoing trade war will harm its export-driven economic progress, and also as an expedient step for advancing its regional hegemony, China might eventually agree to all this as part of a grand bargain.

Essentially, a grand bargain with an “America First” US administration makes sense on the mutually beneficial assumption it would lay the foundations for a bilateral world order.

As part of the deal the US would dramatically reduce its strategic footprint from the Middle East through to the Korean peninsula. The advantage would be it could focus resources on limiting China’s naval role across Indo-Pacific trading routes.

Retreating to a more sustainable role as the indispensable maritime power across the Pacific and Indian oceans would leave China free rein to exert its weight on land in Eurasia.

The US might see that as advantage. Chinese regional hegemony inland would give Russia more to think about on its south-eastern border, rather than causing problems for US allies in eastern Europe. It would also put extreme pressure on India to finally evolve into a subsidiary power to the US maritime empire, one of the wildest strategic dreams in Washington.




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The collapse of the US-Russia INF Treaty makes arms control a global priority


The downside would be that Russia might end up as a subservient commodity supplier to China’s regional empire. Russia’s geo-economic downgrade would strengthen European resolve to run independently of the US, one of the worst nightmares in Washington.

For China, the prize would be achieving the main strategic ambitions of its Belt and Road Initiative, ultimately controlling land trading routes from Beijing to Venice. The strategic cost would be abandoning its maritime ambitions.

Where this leaves Australia

Where would this bilateral world system vision leave Australia?

Certainly worse off than the current situation. With interlocking spheres of influence across the Indo-Pacific rim (US) and the Eurasian landmass (China), at best Australia would become a marginal economic and security appendage of the two hegemons.

Relegated to the role of a price- and rule-taking commodity supplier to China, Australia would remain only nominally a US ally. It would be a rather disposable buffer state at the frontier of two empires, caught between the economic and security crossfire of proxy conflicts.

Weaknesses and opportunities

Compared to this scenario, a protracted US-China trade war may well serve Australia’s national interests much better.

Though tariffs will weaken the global economy, it will hurt the US and China the most. It might even weaken their respective commercial and military grips on the Asia-Pacific region to the point that patterns of more distributed power relations could emerge.




Read more:
Why there will be no winners from the US-China trade war


Economic analysis suggests many Asian economies are already relative winners, as tariffs motivate US and Chinese businesses to “decouple”.

Malaysia, Japan, Pakistan, Thailand and the Philippines lead the nations gaining from US and Chinese companies buying goods elsewhere. Vietnam, Malaysia, Singapore and India are the top beneficiaries from US companies shifting production away from China.

Several Asian countries have also seized the opportunity to play the US and China against each other.

The Philippines has revitalised relations with China to manage the South China Sea dispute more independently from the US. This has not stopped it remaining by far the largest recipient of US military aid in Asia.

South Korea has signed bilateral free-trade agreements with both China and the US, positioning itself as an intermediary that will allow American and Chinese companies to trade in a way that circumvents the tariffs.

Malaysia’s government has affirmed strategic neutrality by pulling back from deals that would put it in debt to Chinese investors.

This is arguably an unprecedented opportunity for Australia to start carving a more independent foreign policy.

Our interests lie in taking an active role in promoting a world system truly based on multilateral rules rather than great power relations.

The worst-case scenario for an ongoing US-China trade war is that it turns into real war. But that’s unlikely.

So long as it remains a manageable trade dispute, it is better for Australia, and much of the rest of the world, than trade peace leading to a bilateral world system.The Conversation

Giovanni Di Lieto, Senior Lecturer of international trade law, Monash Business School, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Agents of foreign influence: with China it’s a blurry line between corporate and state interests


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Australia’s Foreign Influence Transparency Scheme Act obliges individuals to register if they act on behalf of “foreign principals”.
Shutterstock

John Garrick, Charles Darwin University

Former federal trade minister Andrew Robb says he has quit his A$880,000-a-year consultancy job with Chinese-owned Landbridge Group because it didn’t have anything for him do.

Former Victorian premier John Brumby says he has quit as a director of Chinese tech giant Huawei in Australia because he has too much else to do.

Former federal foreign minister and ex-NSW premier Bob Carr has quit his job as director of the Australia-China Relations Institute, an organisation bankrolled by a Chinese billionaire with a history of using donations to cosy up to politicians.

It might be just a coincidence that these decisions have come just days before new foreign influence transparency laws come into effect on March 1.

The new laws are supposed to make visible the “nature, level and extent of foreign influence on Australia’s government and political process”. There is more than enough evidence that greater transparency is needed. But the extent to which the new rules will achieve this is questionable.

Money talks

Federal parliament passed the Foreign Influence Transparency Scheme Act (FITS) in December. The Act obliges individuals to register if they act on behalf of “foreign principals” – be they governments, government-related entities, political organisations or government-related individuals.

Failing to apply for (or renew) registration, providing false and misleading information or destroying records may lead to a prison term of up to six years for individuals and fines of A$88,200 for companies.

Registrable activities include:

  • parliamentary and political lobbying on behalf of a foreign principal
  • communications activities for the purpose of political or government influence
  • employment or activities of former cabinet ministers.

An example of the latter is Andrew Robb.

In February 2016 Robb resigned as federal trade minister and announced he would not recontest his seat. He left parliament in July. Three months later he had his new job, getting paid way more than the prime minister as a consultant to the Landbridge Group.




Read more:
View from The Hill: Would Landbridge be on or off the government’s register of foreign interests?


It is always instructive to note the first jobs taken by politicians after they leave parliament. Those appointments generally reflect relationships already well-groomed.

Landbridge is a privately owned Chinese company, but like many Chinese companies has strong ties to the ruling Chinese Communist Party. Its substantial interests in petrochemicals and ports includes a 99-year lease over the Darwin port, which is considered of strategic importance in China’s diplomatic dance with the United States.

Qualitative differences

China isn’t the only foreign power interested in having influence in Australia, of course. Historical ties have meant that Britain once dictated Australia’s foreign policy. Since World War II the United States has had almost as much power.

Now China, Australia’s largest trading partner, taking about 30% of our exports, looms large. But the power exercised by the Chinese regime is qualitatively different.

For all its economic liberalisation since the death of Mao Zedong in 1976, China remains a one party state, with repression worsening under Xi Jinping. On freedom of the the press, for example, China ranks 176 out of 180 countries.

Commercial, military and political influences are wrapped up together. Lines between state and private enterprises are blurred. When Chinese business interests curry favour with foreign politicians and officials, there’s a high chance that statecraft is also being advanced. “Soft power” is used extensively.

Agent of influence

This is what made the tawdry scandal involving former NSW senator Sam Dastyari so alarming.

Though a humble senator, Dastyari was a key Labor Party fundraiser and powerbroker. He later admitted that vanity and arrogance made him susceptible to the charm offensive of Huang Xiangmo – the billionaire who courted Bob Carr to head up the Australia-China Relations Institute.

Dastyari accepted financial gifts from Huang’s company, including a A$44,000 payment to settle a legal dispute, along with payments from other donors connected to the Chinese Communist Party.




Read more:
The foreign donations bill will soon be law – what will it do, and why is it needed?


Such payments made it obvious why he defied his own party’s policy and defended China’s militant stance in the South China Sea. He was subsequently labelled a Chinese “agent of influence”.

These revelations resulted in Dastyari resigning from parliament in 2017. Earlier this month it was revealed the federal government had rejected Huang’s bid to become an Australian citizen and stripped him of his permanent residency visa.




Read more:
Why do we keep turning a blind eye to Chinese political interference?


On the basis of these examples highlighted above, there’s a strong case for making influence peddling open and transparent.

Whether the new laws can achieve that is another matter. They may curtail flagrant scenarios where those leaving public office sell their wares to the highest bidder. But to work effectively, the laws and their enforcers will need to constantly adapt and evolve as agents look for creative ways to wield influence from the shadows.The Conversation

John Garrick, Senior Lecturer, Business Law, Charles Darwin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Huawei or the highway? The rising costs of New Zealand’s relationship with China



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New Zealand’s Prime Minister Jacinda Ardern meeting with the Premier of the State Council of the People’s Republic of China Li Keqiang during last year’s ASEAN summit.
AAP Image/Mick Tsikas, CC BY-ND

David Belgrave, Massey University

Until recently, New Zealand’s relationship with China has been easy and at little cost to Wellington. But those days are probably over. New Zealand’s decision to block Huawei from its 5G cellular networks due to security concerns is the first in what could be many hard choices New Zealand will need to make that challenge Wellington’s relationship with Beijing.

For over a decade New Zealand has reaped the benefits of a free-trade agreement with China and seen a boom of Chinese tourists. China is New Zealand’s largest export destination and, apart from concerns about the influence of Chinese capital on the housing market, there have been few negatives for New Zealand.

Long-held fears that New Zealand would eventually have to “choose” between Chinese economic opportunities and American military security had not eventuated.




Read more:
New Zealand’s Pacific reset: strategic anxieties about rising China


But now New Zealand business people in China have warned of souring relations and the tourism industry is worried about a downturn due to backlash following the Huawei controversy.

China’s growing might

During Labour’s government under Helen Clark (1999-2008) and under the National government with John Key as prime minister (2008-2016), New Zealand could be all things to all people, building closer relationships with China while finally calming the last of the lingering American resentment over New Zealand’s anti-nuclear policies. But now, there are difficult decisions to be made.

As China becomes more assertive on the world stage, it is becoming increasingly difficult for New Zealand to keep up this balancing act. Two forces are pushing a more demanding line from Beijing. One is China’s move to assert more control over waters well off its coast.

For decades, Beijing was happy to let the US Navy maintain order over the Western Pacific to facilitate global trade with China. As China’s own economic and military abilities have grown, it has begun to show that it is willing to protect what it sees as its own patch. Its mammoth island building in the South China Sea is a testament to its new-found desire to push its territorial claims after decades of patience.




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Despite strong words, the US has few options left to reverse China’s gains in the South China Sea


China’s stronger foreign policy is testing what is known as the “rules-based order”, essentially a set of agreed rules that facilitate diplomacy, global trade, and resolve disputes between nations. This is very concerning for New Zealand as it needs stable rules to allow it to trade with the world. New Zealand doesn’t have the size to bully other countries into getting what we want.

Trump-style posturing would get New Zealand nowhere. A more powerful China doesn’t need to threaten the rules-based system, but the transition could create uncertainty for business and higher risks of trade disruption. It is vital for New Zealand that an Asia-Pacific dominated by China is as orderly as one dominated by the US.

Tech made in China

The other force challenging the relationship is China’s emergence as a source of technology rather than simply a manufacturer of other countries’ goods. Many Chinese firms like Huawei are now direct competitors of Western tech companies. Huawei’s success makes it strategically important for Beijing and a point of pride for ordinary Chinese citizens.

Yet, unlike Western countries, China actively monitors its population through a wide variety of mass surveillance technology. Therefore, there is a trust problem when Chinese firms claim that their devices are secure from Beijing’s spies. New Zealand’s decision to effectively ban Huawei components from 5G cellular networks could be the first in many decisions needed to ensure national security.

Chinese designed goods are becoming more common and issues around privacy and national security will get stronger as everyday household goods become connected to the internet. Restrictions on Chinese-made goods will further frustrate Beijing and will invite greater retaliation to New Zealand exporters and tourist operators.

In more extreme cases, foreign nationals have been detained in China in response to overseas arrests of prominent Chinese individuals. As many as 13 Canadians were detained recently in China following the arrest of Huawei’s CFO Meng Wanzhou in Vancouver at the request of US prosecutors.




Read more:
Australian-Chinese author’s detention raises important questions about China’s motivations


Declaring the limits of the relationship

If New Zealand is to maintain a healthy relationship with China, it needs to be clear on what it is not willing to accept. It is easy to say individual privacy, national security and freedom of speech are vital interests of New Zealand, but Wellington needs to be clear to its citizens and to China what exactly those concepts mean in detail. All relationships require compromise, so Wellington needs to be direct about what it won’t compromise.

New Zealand spent decades during the Cold War debating how much public criticism of the US the government could allow itself before it risked its alliance with the Americans. New Zealanders wondered if they really had an independent foreign policy if they couldn’t stand up to their friends. Eventually nationalist sentiment spilled over in the form of the anti-nuclear policy.

New Zealand is now heading for the same debate as Kiwis worry about how much they can push back against Beijing’s interests before it starts to hurt the economy. Now that the relationship with China is beginning to have significant costs as well as benefits, it’s probably time New Zealanders figured out how much they are prepared to pay for an easy trading relationship with China.The Conversation

David Belgrave, Lecturer in Politics and Citizenship, Massey University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

As Australia’s soft power in the Pacific fades, China’s voice gets louder



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China is broadcasting to more than 1 billion people in several different languages, while Australia sits on its soft power reviews.
Screenshot/YouTube

Helen Vatsikopoulos, University of Technology Sydney

This week, Department of Communications and Arts secretary Mike Mrdak told a Senate hearing our Pacific neighbours will soon experience “the full suite of programs available on Australian networks”. This means the region will see some of our most highly rated reality shows such as Married at First Sight and The Bachelor.

This is all part of the government’s Pacific pivot and the A$17 million package to broadcast commercial television throughout the region announced by the prime minister last year. It’s also part of Australia’s “soft power” strategy, a branding that enables it to influence other countries and have its voice heard.

Australia’s soft power attraction in the Asia Pacific has been in free fall for the past few years. The government is sitting on two major reviews. First is the Soft Power Review – a strong recommendation of the 2017 Foreign Policy White Paper – for which the consultation period ended in October 2018. Second is the Review of Australian Broadcasting in the Asia-Pacific, the consultation period for which ended in August 2018.

The second review was established in 2017. This was the first time the government addressed the issue of soft power in the Pacific since axing the ABC’s Australia Network in 2014. The Australia Network broadcast to the region with redistribution partnerships to 30 countries.

The ABC charter states it has responsibility “to transmit to countries outside Australia broadcasting programs of news, current affairs, entertainment and cultural enrichment” that will “encourage awareness of Australia and an international understanding of Australian attitudes on world affairs”.

In other words, the ABC is already enabled as Australia’s soft power tool. Despite this, the government is giving money to commercial televisions to do the work. At the Senate hearing this week, Mrdak denied this was in breach of the ABC charter because it did not involve broadcasting but purchasing content made by Australia’s commercial broadcasters for distribution to regional broadcasters.




Read more:
Lost in transmission: the Australia Network, soft power and diplomacy


The government must move quickly with its reviews and their recommendations, and articulate its policy responses before the next election, if Australia’s standing in the region is to be restored. Because other powers, especially China, are fast filling the gap we’re leaving behind.

The importance of soft power

Soft power is a term coined by Harvard Professor Joseph S. Nye in the late 1980s. He referred to soft power as the ability of a country to gain influence and power through attraction and without coercion. Soft power leads to nation branding or the reputation a nation enjoys in the world.

This is what business academic Yin Fang defines as:

… the total sum of all perceptions of a nation in the minds of international stakeholders, which may contain some of the following elements: people, place, culture/language, history, food, fashion, famous faces (celebrities), global brands and so on.

The 2018 Soft Power 30 Report showed Australia had fallen four places in four years. The report is a measure of the influence of international nations. We are 10th in the overall soft power index but are marked as moving downward: 7th in culture, 6th in education, 9th in government and completely absent from the top ten in the areas of digital, enterprise and engagement.




Read more:
Soft power and the institutionalisation of influence


In the alternative, and hipper, Monocle Soft Power Index, Australia sits at number 8. But the report also warns it “… is in need of a shakeup if it is to remain an attractive proposition”.

It praises the country for committing to an official review of its soft power but adds “it’s unclear if that will now be a priority”.

In addressing a seminar on the future of Australia’s broadcasting and soft power in the region, veteran broadcaster and former head of the Australia Network Bruce Dover said:

Where once Australia was a brand in Asia, people knew what the Australia Network was, they knew what Radio Australia was, it’s lost – it’s gone…

He then added that the axing of the Australia Network by the Coalition government “… was for more political reasons about whacking the ABC than a considered view on the worth of soft diplomacy or having a voice in the region”.

The ABC isn’t entirely free from blame. It abandoned the most needy of its audience in Asia and the Pacific by switching off its shortwave radio service in 2017. Citing outdated technology, the ABC was trying to make the most of its severe funding cutbacks by prioritising digital services. And that’s when China moved in and took over the shortwave frequencies.

So, what’s China doing?

The government’s Pacific pivot is about waking up and finding China has expanded into the region, and not just in infrastructure projects but in broadcasting. A recent ABC investigation reported China’s Central Global Television Network (CGTN) is broadcasting to 1.2 billion people in Chinese, English, French, Spanish, Russian and Arabic and is expanding to create 200 international bureaus by 2020.




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Soft power goes hard: China’s economic interest in the Pacific comes with strings attached


This may be, as the ABC suggests, “informational warfare”, where the soldiers may actually be Westerners working for the other side. This year alone, more than 2,200 people lost their jobs in the Australian media.

Edwin Maher was one of the first Australians to work for CCTV, as CGTN was then called. He was a weatherman when I worked in the ABC’s Melbourne newsroom in the late ’80s, but for over a decade he has been a presenter on China’s television. There will be more like him in future.

China is actively recruiting Westerners to front its programs. Australian faces will likely present news on on CGTN, while Australian voices broadcast in English to Pacific Islanders on shortwave.

In the competitive world of nation-branding and soft power, who will know the difference? The new Edwin Mahers will be telling the same stories as Australia, but with a China focus. In 2016 President Xi Jinping announced that the media must serve the party and directed them to tell China’s stories that reflect well on the ruling party and its policies.

This is the reality of informational warfare. The Morrison government must release its two crucial soft power reports and announce a policy framework that will determine our standing, influence and power in the region.

Vanuatu’s Daily Post has welcomed the news Australia will provide entertaining programs to the Pacific. But the opinion piece also says:

Pacific islanders aren’t likely to be very fussy about how that comes about. But if the goal is helping Pacific islanders know more about Australia — and helping Australians know more about the Pacific – then a different approach is needed.

Australia’s soft power is too important to be determined by vengeful payback to the ABC, or by currying favour with commercial television barons. It is about statecraft.The Conversation

Helen Vatsikopoulos, Lecturer in Journalism, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Explainer: who are the Uyghurs and why is the Chinese government detaining them?



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Many Muslim minorities in China, particularly the Uyghurs, are arbitrarily arrested and imprisoned.
from shutterstock.com

Anna Hayes, James Cook University

The Uyghurs are Turkic-speaking Muslims from the Central Asian region. The largest population live in China’s autonomous Xinjiang region, in the country’s north-west. The Uyghurs are one of a number of persecuted Muslim minorities in Xinjiang, including the Kazakhs, Uzbeks, Tajiks, Kyrgyz and Hui.

The region’s name suggests the Uyghurs have autonomy and self-governance. But similar to Tibet, Xinjiang is a tightly controlled region of China.

Many Uyghur communities also live in countries neighbouring China, such as Uzbekistan, Kyrgyzstan and Kazakhstan. An estimated 3,000 Uyghurs live in Australia.

China’s President Xi Jinping has overseen a hardline approach towards Muslim minorities living in Xinjiang, especially the Uyghurs. In recent years, the government has installed sophisticated surveillance technology across the region, and there has been a surge in police numbers.

Muslim minorities are being arbitrarily arrested and imprisoned. It’s estimated around one million Uyghurs have been detained in what China calls “vocational training centres”.

These are purpose-built detention centres, some of which resemble high-security jails. A recent ABC investigation found 28 detention camps had expanded across Xinjiang as part of China’s program of subjugation.

There is growing evidence of human rights violations inside the centres as well as reports of deaths in custody and forced labour.

Members of the Uyghur diaspora have been reported as requesting “proof of life” from Beijing over disappeared family members back in Xinjiang. The Guardian recently reported an estimate that 80% of Uyghurs in Australia would have a relative who has disappeared into the camps.




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What China’s censors don’t want you to read about the Uyghurs


History of discrimination

The People’s Republic of China annexed Xinjiang in 1949. At this time, it was estimated the Uyghur numbered around 76% of the region’s population. Han Chinese – the country’s majority ethnic group – accounted for just 6.2%, with other minority groups making up the remaining total.

Since 1949, Han migration to the region has diluted the ethnic ratio. Official statistics show the population is now made up of 42% Uyghurs and 40% Han.

The largest population of Uyghurs live in China’s Xinjiang province, in the country’s north-west.
from shutterstock.com

Beijing does not recognise the region as a colony. But the 1949 annexation represents colonisation to Xinjiang’s Muslim minorities and segments of the population have resisted Beijing’s rule. Many refuse to speak Mandarin, while others campaign for independence.

Beijing regards any discontent or criticism of the Chinese Communist Party to be threatening. Minority dissent is treated as a danger to state security. This is even if it involves moderate voices calling for improvements in health, education and employment.

To Beijing, territorial integrity is of utmost importance. It does not tolerate any expression contrary to the official position that Xinjiang has always been part of China.

Beijing has long considered Xinjiang and the Muslim minorities such as the Uyghurs to be “backward”. During the Communist Party’s Great Leap Forward (1958-1962), ethnicity and religion were singled out as both “obstacles to progress” and “backwards custom”.

Brutal crackdowns in the 1980s and 90s led to significant numbers of Uyghurs fleeing China to seek asylum.




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China’s Uyghur re-education centres in Xinjiang will not produce a loyal and obedient population


Current situation

Repeated attempts at rapid and forced assimilation, discriminatory and oppressive policies, and a cycle of what commentators have labelled “repression-violence-repression” have led to periodic protests across Xinjiang.

In extreme cases, acts of terrorism – such as the Kunming train station attack – have been carried out both inside Xinjiang and in other parts of China.

In recent decades, Beijing has recast the Uyghur ethnic group as a terrorist collective. This has allowed Beijing to justify its transformation of Xinjiang into a surveillance state. There has also been a marked rise of Islamophobia across China.

Some Uyghurs have been employed by the state to spy on other Uyghurs, reporting any suspicious or illegal behaviour. This includes if someone has given up smoking, refuses to drink alcohol or even if a Uyghur refuses to watch Chinese news broadcasts.

Beijing’s surveillance includes face and voice recognition, iris scanners, DNA sampling and 3D identification imagery of Uyghurs. These were introduced following Xi’s 2016 appointment of Chen Quanguo as Xinjiang Party Chief. Chen’s previous appointment was in Tibet, where he implemented similar control measures over the Buddhist population.

Beijing claims the detention centres across Xinjiang are for “vocational training”, but a US Congressional hearing on the camps and subsequent report characterised them as “political re-education” centres. The education involves daily indoctrination into Communist ideology and attempts at eradicating minority culture, language and religion.




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Patriotic songs and self-criticism: why China is ‘re-educating’ Muslims in mass detention camps


Recent reports have identified more than 100 Uyghur intellectuals including writers, poets, journalists and university professors are now among those detained. The persecution of intellectuals, who speak out against oppression, and continue traditional practice, occurs even if they are moderate in their views and working towards reconciliation.

In 2014, Beijing arrested Ilham Tohti, an economics professor who rejected separatism and promoted reconciliation in Xinjiang. He is currently serving a life sentence after being falsely accused of being a separatist.

Pressuring the Chinese government

Xinjiang is geographically important to China’s Belt and Road initiative – a development strategy involving infrastructure and investments in Europe, Asia and Africa. This could provide an avenue for the international community to apply diplomatic pressure in the way of sanctions. Another option is suspension of, or withdrawal from, existing Belt and Road agreements.

Outside countries have a duty to intervene and force Beijing to comply with international human rights.The Conversation

Anna Hayes, Senior Lecturer in Politics and International Relations, James Cook University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

A Trump-aligned World Bank may be bad for climate action and trade, but good for Chinese ambitions


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A World Bank in sync with Donald Trump’s views about climate change and multilateralism would probably help to increase Chin’s role in international development and finance.
Shutterstock

Usman W. Chohan, UNSW

The seat of World Bank president is becoming vacant. Its president, Jim Yong Kim, will step down on January 31, three years earlier than his term formally ends.

His move – described as “sudden” and a “shock,” particularly since the World Bank has been going through significant internal restructuring – gives US president Donald Trump the chance to appoint a replacement more aligned with his outlook.




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This is because, since the World Bank’s establishment in 1945, the United States has had outsized influence as its largest shareholder. Its president has always been an American citizen nominated by the US government. Kim was chosen by the Obama administration in 2012.

Rumours circulated early on that Trump was considering his daughter Ivanka for the job. Even though that has since been denied, it’s likely he will choose a candidate sympathetic to his worldview.

This may mean a substantial change in the World Bank’s priorities. In particular, in two areas the bank has played an important and positive role: funding sustainable projects to deal with climate change (“climate resilience”); and encouraging robust international connectivity through trade.

Focus on climate resilience

The World Bank has put substantial emphasis on funding projects in developing countries that address climate change. Last financial year 32% of its financing – a total of US$20.5 billion – was climate-related.

Recently approved World Bank projects included climate resilient transport in the Oceania region (such as in Tonga and Samoa), and solar projects across Sub-Saharan Africa. This is all part of a detailed five-year Climate Change Action Plan underway since 2016.

This concern about the consequences of climate change stands in marked contrast to the Trump administration’s record.

Trump’s disregard of climate science is reflected in the defunding or reorganisation of climate-related research projects and institutions. His appointee to head the US Environmental Protection Agency, Scott Pruitt, played a key role in the US withdrawing from the Paris Climate Agreement and energetically worked to gut pollution protection regulations.

So there’s good reason to believe the Trump administration’s pick for the World Bank will reflect its hostility to climate security, and that the bank’s priority towards funding climate resilience will change as a result.

Antipathy towards multilateralism

The Trump administration has already sought to curb salary growth among World Bank staff. More severely, Trump’s National Security advisor, John Bolton, has argued the World Bank should be privatised or simply shut down.

This is part of a wider “antipathy towards multilateralism” that includes institutions such as the United Nations and the World Trade Organisation.




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Australia has to prepare for life after the World Trade Organisation


Trump’s belief that free trade has hurt the US is at odds with the World Bank’s long history of facilitating reforms designed to promote international trade.

Part of the original logic for the World Bank was that trade was seen as a means to create interdependence, and thus reduce economic conflict that might lead to war.

The Trump administration has shown it is more than willing to revert to an old-fashioned trade war.

Its tariff contest with China (which joined the WTO in 2001 with the World Bank’s help) is already hurting global manufacturing, with the International Monetary Fund downgrading its global economic growth forecasts as a result.

Though a Trump appointee might not upend the World Bank’s commitment to free trade in principle, the result might be an organisation less active in promoting multilateralism in practice.

Playing to China’s strengths

Ironically a Trump-compliant World Bank might result in promoting its sidelining to the advantage of China.

In its first six decades of existence the World Bank was an immensely powerful international institution. But its relevance to international development and finance is now being overshadowed by alternative funding mechanisms such as private-sector lending and particularly institutions related to Chinese international development initiatives.

China is planning through its Belt and Road Initiative to spend US$1 trillion on international infrastructure projects over the coming decade. Much of these are focused on Eurasian and African regions where the World Bank has struggled most to promote sustainable prosperity.

China has also has built a rival to the World Bank in the form of the Asian Investment Infrastructure Bank (AIIB), which has a sizeable balance sheet and a proactive approach to funding projects, including those in sustainable development.




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US sparks new development race with China – but can it win?


But in climate resilience and global economic integration, the World Bank still retains the mantle of global leader. Thus far it has welcomed cooperation with the AIIB, signing a memorandum of understanding in 2017.

Blunt its work in these two areas and the World Bank becomes more irrelevant. Combined with the organisation’s serious governance problems, which are most unlikely to be addressed by a Trump appointee, the future for the World Bank is not bright.The Conversation

Usman W. Chohan, Economist, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australian-Chinese author’s detention raises important questions about China’s motivations



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Is the arrest of Yang Hengjun part of a series of retaliatory measures by the Chinese government?
PEN America

Tony Walker, La Trobe University

The arrest of an Australian-Chinese citizen in China for unspecified reasons is the last thing Australia needs at a sensitive moment in the reset of a relationship that has chilled over the past two years.

But whether it likes it or not, Canberra is being drawn into a broader controversy over China’s detention of foreign nationals on grounds that are opaque and at the mercy of an unpredictable Chinese justice system.

The arrest last weekend of author and diplomat Yang Hengjun raises the question of whether he has become part of a pattern of retaliatory measures by a Chinese government that finds itself under stress from within and without.




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Huawei executive’s arrest will further test an already shaky US-China relationship


At this stage it has not been revealed why Yang, a critic of China’s Communist Party, has been detained. On a previous visit to China in 2011 he was arrested and released without charge. He described that episode as a “misunderstanding”.

What should concern Australian officials is that Yang will find himself lumped with other foreign nationals from countries that may have displeased China and therefore become hostages to a wider diplomatic game.

Beijing’s initially muted response to Australia’s decision to exclude, on security grounds, the Chinese technology behemoth Huawei from building its 5G network may have disguised more intense displeasure.

In the case of the arrest late last year of two Canadian nationals on accusations of “endangering national security”, it is hard to place any other interpretation on their detention than that they are pawns, even hostages, in a broader conflict.

Diplomat Michael Kovrig and businessman Michael Spavor were arrested following the detention in Vancouver of the chief financial officer and daughter of the founder of Huawei, pending her extradition to the United States.

Huawei executive Meng Wanzhou.
AAP/EPA/ Maxim Shipenkov

The US Justice Department is bringing charges against Meng Wanzhou for violating sanctions against Iran.

Her case is highly sensitive and enmeshed in a complex US-China relationship scarred by an ongoing trade dispute. In all of this, Canada, in its response to a US extradition request, finds itself the target of Chinese reprisals.

In the case of the unfortunate Canadians ensnared in a diplomatic argument that originated in Washington, a Chinese saying could be applied:

Kill the chicken to frighten the monkey.

In this case, Canada is the “chicken” and the United States is the “monkey”.

Whatever China’s tactics are in all of this, the arrest of the Canadian nationals on national security grounds represents a very serious development. The ripples from it are spreading as more and more countries become alarmed at China’s resort to what could be described as hostage-taking to protect – or advance – its interests.

One lesson might be that if a country, or a company for that matter, finds itself in a dispute with China, then advice to its nationals or employees should be to steer clear of the People’s Republic.

China’s behaviour in this latest stage would hardly seem to correspond with respect for a rules-based international order.

What can be read into these worrying developments is that under pressure, the Chinese regime is adopting a more combative approach to dealing with its foreign policy challenges as its size and reach brings it into conflict with the United States and its allies.

A slowing Chinese economy is adding to pressures on a regime whose tenure depends on maintaining employment and countering unrest.

Above all else, the issue of “stability” preoccupies China’s leaders, who are familiar with the chaos that has swept the country in its long history.

In Beijing this week, President Xi Jinping expressed his concerns about a difficult period ahead for China as it grapples with challenges at home and abroad.

Speaking to officials he warned of a “black swan” event, in which China might be obliged to deal with unexpected developments that threw it off its course. This included what he called a “grey rhinoceros event” – a reference to known risks that are ignored until too late. He said:

In the face of a turbulent international situation, a complex and sensitive environment, and the arduous task of reform… We must be highly vigilant against “black swan” and “grey rhinoceros” incidents.

These sentiments are hardly surprising given the challenges China faces in transforming its economy from an investment-led to a demand-driven model in a slowing economic environment. But they do suggest a higher-than-usual level of anxiety in Beijing in this latest period.

In the years since China began opening up to the world in the late 1970s, it is hard to identify a period that is more challenging for a hard-pressed Chinese leadership. One possible exception is a period in the early 1990s when the country struggled with inflationary pressures and risks of a hard economic landing from a retrenchment in government spending.

The difference between now and then is that China’s economy then was a fraction of the size it is today. Ripples from a Chinese slowdown were hardly felt beyond China’s shores.




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Australia and China push the ‘reset’ button on an important relationship


Today, the effects of a slowing Chinese economy will have an impact across the globe. This is not least in Australia, one-third of whose exports in goods and services are bound up in a trading relationship.

Australian official cautiousness over the detention of an Australian-Chinese national is explained by a desire not to elevate a dispute with Beijing beyond what is necessary.

Foreign Minister Marise Payne has joined her Canadian and other colleagues in expressing “concern” over the detention of the two Canadians in apparent retaliation for the detention of the Huawei official.

If it transpires that an Australian-Chinese citizen has been similarly detained, Payne will have to go beyond simply expressing concern in solidarity with the Canadians.

In defence of their nationals, including a third individual whose sentence of 15 years for drug smuggling was converted to a death penalty, Canadian Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland have been outspoken.

What should now be clear is that expectations of China becoming a benign power are mistaken. These latest episodes are proving to be a lesson in dealing with a country that is no longer “hiding its capacities” and “biding its time”, as former paramount leader Deng Xiaoping advised.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.